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A federal judge has sentenced Roger D. Blackwell to six years in federal prison for his role in the 1999 Worthington Foods Inc. insider-trading scheme.

U.S. District Court Judge James L. Graham on Thursday also ordered Blackwell, 65, to pay a $1 million fine.

Earlier in the day, Graham sentenced co-defendants Kelley L. Hughes to 33 months in prison, and Hughes' husband, Kevin L. Stacy, to 27 months. They were each fined $53,433, their share of the ill-gotten proceeds from trading in Worthington Foods stock prior to the public announcement in 1999 that the company was being acquired by Kellogg Co.

Blackwell, a former Ohio State University marketing professor, and his co-defendants have until Jan. 9 to report to prison. Blackwell's attorneys requested he be sent to a minimum-security prison in Morgantown, W.Va.

All three face three years of probation following their release. They were ordered as well to provide the court with full access to their financial records, and to participate in any psychological or drug and alcohol treatment if their probation officers deem it necessary.

Judge Graham forbid Blackwell from profiting from any books, movies or other media that may result from the trial.

Final pleas

Prior to handing down the sentences, Graham gave the three defendants an opportunity to make a statement to the court.

Blackwell, dressed in a dark suit, white shirt and red tie, told Graham in front of a packed courtroom that "words cannot begin to express the difficulty of the past few years." He said he has become closer to God during his ordeal.

Blackwell, who retired from the OSU faculty following his conviction, said he was disappointed that he will no longer be able to teach. Paraphrasing from Carmen Ohio, Ohio State's alma mater, he added, "My students fill my heart with rebounding thrill, with joy which death alone can still."

Blackwell ended his statement by asking Graham to consider two community service projects in lieu of prison. One involved consumer behavior in diabetes treatment run by the U.S. Bureau of Primary Health Care. The other involved a mental and physical health safety project for low-income residents run by the Ambassadors for Christ Fellowship in Columbus.

While calling the projects "imaginative and admirable," Assistant U.S. Attorney J. Michael Marous objected to a sentence for Blackwell that did not involve prison.

"Our system in the United States depends upon free enterprise and the rule of law," Marous said. "(He) thought Roger Blackwell has made it to the top of the system and does not have to respect the rule of law."

Hughes, crying throughout her statement, said she could not adequately express her sorrow for participating in the scheme. She apologized to the court for the time and expense spent on the trial, and for the time the jury had to spend hearing the case. Stacy said the couple has been financially decimated because the trial and their defense has cost them more than $450,000. He said the couple had tried to lead a good Christian life, and highlighted several charities the couple has been involved in for years.

Graham responded to Hughes' and Stacy's statements by telling them that he believed they were decent people who had been led astray by Blackwell. The government alleged Blackwell tipped Hughes, an office manager at Blackwell's marketing company, Roger Blackwell Associates, to the pending Kellogg deal during her annual personnel review. Graham said had the couple not respected and revered Blackwell so much, he doubts they would be in their current position.

The three defendants made two last-minute attempts to avoid jail time. Attorneys filed motions for a new trial on Dec. 12, which Graham denied on Dec. 14. Just before the end of sentencing, defense attorneys also requested that their clients remain free on bond pending the appeal. Graham denied those motions as well.

Revisiting the trial

Blackwell, Hughes and Stacy were convicted in June following a month-long trial. The jury found Blackwell, a director at Worthington Foods at the time of the Kellogg deal, guilty on 19 counts of insider trading, making false statements, conspiracy and obstruction.

Hughes, 42, was found guilty on 21 counts, and Stacy, 48, was found guilty on 13 counts.

Government prosecutors alleged Blackwell tipped off several friends, work associates and family members to the proposed deal in September 1999. That advance knowledge, the government alleged, allowed the group to make more than $890,000 in profit on trades after Worthington Foods' share priced doubled following the deal's public disclosure Oct. 1, 1999.

The government said Hughes and Stacy made about $105,000 from trading in Worthington Foods shares, money they used to buy a house in Clintonville.

Blackwell is still facing an insider trading civil lawsuit filed by the Securities and Exchange Commission in 2003.

Mixed reactions

After the trial, Blackwell exited the courthouse with his legal team to face a throng of media. William C. Wilkinson, Blackwell's attorney and a partner at Thompson Hine LLP in Columbus, would not comment on the sentence. He did say his firm took over Blackwell's defense in September, after the guilty verdict, and it has been working hard on an appeal to the Sixth U.S. Circuit Court of Appeals in Cincinnati. Before driving off, Wilkinson said he advised Blackwell not to comment on the case.

Hughes and Stacy left the courthouse before Blackwell's sentencing was completed. David Winters, Hughes' attorney and a partner at Winters & Merkle, said he was disappointed Hughes didn't get a lighter sentence.

Justin Voss, a longtime friend of Blackwell and an acquitted co-defendant in the trial, called the jury's verdict and the judge's sentence the product of a government conspiracy. The government wanted to make an example out of Blackwell by prosecuting him on criminal charges, Voss said, because Blackwell did not settle the SEC's civil lawsuit.

"The SEC wanted to find a test case that was exemplary ... and that was Roger Blackwell," Voss said.

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